• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • With Cap and Trade, It Will be Laborless Day

    Traditionally, Labor Day symbolizes the end of summer but historically, Labor Day was a “creation of the labor movement and is dedicated to the social and economic achievements of American workers.” A day of rest. A paid holiday. Well, if Congress passes cap and trade legislation, many Americans will be forced to take unpaid days of rest because they’ll be unemployed.

    The Heritage Foundation’s Center for Data Analysis found that, for the average year over the 2012-2035 timeline, job losses will be 1.1 million greater than without a cap and trade bill. By 2035, there is a projected 2.5 million fewer jobs below the baseline. Some of these jobs will be destroyed completely. Others will move overseas where carbon capping isn’t in their country’s agenda and therefore the cost of production is cheaper.

    We’re not the only ones who project unemployment from cap and trade. The Brookings Institute, for instance, projects that cap-and-trade will increase unemployment by 0.5% in the first decade below the baseline. Using U.S. Census population projection estimates, that’s equivalent to about 1.7 million fewer jobs than without cap-and-trade. A study done by Charles River Associates prepared for the National Black Chamber of Congress projects increases in unemployment by 2.3-2.7 million jobs in each year of the policy through 2030–after accounting for “green job” creation.

    Surely the government can create green jobs by subsidizing windmill and solar projects. But we can point to Spain as an example of how green energy investments destroy more jobs than they create. The Spanish research, directed by economist Gabriel Calzada, at King Juan Carlos University, analyzed the subsidized expenditure necessary to create the green jobs in Spain. It compared those funds to the private expenditure needed to support the average conventional job. Supported by other data as well, they conclude that each subsidized green job in Spain eliminated over two conventional jobs.

    Two environmentalists from the Alliance for Sustainable Energy (ASE) recently authored a response to undermine this study. David Kreutzer, The Heritage Foundation’s Senior Policy Analyst in Energy Economics and Climate Change, debunks ASE’s claim:

    “While there are multiple problems with the ASE critique of Calzada’s work, the flawed foundation of their critique is best illustrated by ASE’s following statement: “Furthermore, there is no justification given for the assumption that government spending (e.g., tax credits or subsidies) would force out private investment.”

    That is, the environmentalists do not see government expenditure as having a cost. They employ the same free-lunch fallacy that underpins essentially all the analysis showing green-energy subsidies increase employment.

    The first week of every principles of economics class goes over the problem with free-lunch assumptions. The labor and material used to make windmills or solar panels or to install insulation cannot simultaneously be used to make refrigerators and automobiles. When government spends more money, it necessarily diverts labor, capital and materials from the private sector.

    Dr. Calzada simply calculated how many jobs, on average, would have been supported with these resources had they been left to the private market. The ASE critique doesn’t even recognize that the costs exist. Therefore, the ASE critique can hardly be used to undermine the credibility of the Spanish conclusion—subsidies for green technologies reduce overall employment.”

    Happy Labor Day, and many more to come – for those of you who will still have jobs if cap and trade passes.

    To read The Heritage Foundation’s full economic analysis of the Waxman-Markey cap and trade legislation, go here. To sign up to receive the Energy & Environment weekly newsletter, go here.

    Posted in Energy [slideshow_deploy]

    7 Responses to With Cap and Trade, It Will be Laborless Day

    1. Bobbie Jay says:

      They are insisting and focused on destroying the American way of life. They are ignorant to positive and productive solutions. They fail to recognize simple logic.

      This government is an excellent role model to liars and cheaters, cons, criminals and corruptors. That's why the president's live speech and activities to the youth, is not welcome. This government shows no reason to be trustworthy.

    2. Robert , Mississippi says:

      I am sure everyone has seen Al Gore's famous chart in the previews while attending a movie. Notice the scale is extremely large. If you take a part of the graph and blow it up many times the increase in temperature occurs thousands of years before the carbon increases. Nothing more than pulling the wool over people's eyes.

    3. Pingback: Morning Conservative Reading List - September 6, 2009 - AIP Blog - American Issues Project

    4. Chuck, WV says:

      Let Congress know that Americans can not afford to lose jobs with this cap and trade legislation. Visit http://tinyurl.com/klfut8.

    5. Pingback: Grassroots in Nebraska: In the News, September 4-11, 2009 | Grassroots in Nebraska

    6. Pingback: Honor America’s workers, throw EFCA out. |

    7. The Patriot says:

      I hear all this talk about jobs being lost under the cap and trade bill. Never a mention of what jobs would be lost. I'm assuming they would be jobs in the energy sector, but why would those jobs be cut? Would it be because of the investment in greener energy sources, so less fossil fuel would be required, so less people would need to work those jobs?

      My take on it is that fossil fuels are finite. It will eventually run out. Maybe we won't see a decline for 50 years, or 100 years or more. But with the ever increasing consumption of other countries such as China and India and the demand increasing for fossil fuels for those countries it might be sooner. If America invests in greener technology now, when that day comes we will be ahead of the curve and it will have less of an impact on us. Again definately not for our kids, or even their kids, but the kids a couple generations down the line will say thanks for thinking ahead for once.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×